Globalization and Declining Unionization in the United States

For decades, the private‐sector unionization rate in the United States has been falling. At the same time, the integration of the United States into the world economy has been rising. Many anecdotes suggest the latter has played a role in that decline, with unions feeling pressured to reduce employment and/or compensation demands in the face of rising cross‐border activity of employers. To investigate this possibility econometrically, in this paper I assembled a panel of U.S. manufacturing industries that matches union‐coverage rates with measures of global engagement such as exports, imports, tariffs, transportation costs, and foreign direct investment. The main finding is a statistically and economically significant correlation between falling union coverage and greater numbers of inward FDI transactions. Possible interpretations of this finding are then discussed. Because U.S. affiliates of foreign multinationals have higher unionization rates than U.S.‐based firms do, this correlation does not reflect just a compositional shift toward these affiliates. Instead, it may reflect pressure of international capital mobility on U.S.‐based companies, consistent with research on how rising capital mobility raises labor‐demand elasticities and alters bargaining power.     

Collective Bargaining Coverage under Trade Unionism: A Sociological Investigation

Does high union density lead to high collective bargaining coverage? Since collective bargaining is seen as the raison d'être of trade unions, this is often assumed to be the case; some observers think that union density is ‘a floor’ below which collective bargaining coverage is unlikely to fall. With its very high union density, Denmark is a case in point. This article investigates the collective bargaining coverage issue in the Danish case, based on an individual-level employee survey with 1720 respondents. Collective bargaining coverage is shown to be much lower than union density, and some methodological issues in this connection are considered. In order to find some possible explanations for this surprising finding, the question of variance of collective bargaining coverage between groups of employees is discussed in the light of theories of service society and recent research results and theories. The impact of central variables is investigated through multivariate analysis, and it turns out that by far the most important variable predicting an employee's collective bargaining coverage is a variable mostly neglected in comparative analyses: occupational status. Salaried employees have a much lower collective bargaining coverage than manual workers in Denmark, and some possible reasons for this are given.     

Collective Bargaining and High‐Involvement Management in Comparative Perspective: Evidence from U.S. and German Call Centers

This article assesses the relationship between national and collective bargaining institutions, management practices, and employee turnover, based on case study and survey evidence from U.S. and German call center workplaces. German call centers were more likely to adopt high‐involvement management practices than those in the United States, even across workplaces with no collective bargaining institutions. Within Germany, union and works council presence was positively associated with high‐involvement practices, while works council presence alone had no effect. In contrast, union presence in U.S. call centers showed either a negative association or no association with these practices. National and collective bargaining institutions and high‐involvement management practices were associated with lower quit rates in both countries, with only partial mediation.     

Changes in Wage-setting Arrangements and Trade Union Presence in the 1980s

In this paper we detail the results of a retrospective survey of changes in trade union and wage-setting arrangements in the 1980s for a sample of 558 UK companies. Our key findings are as follows. (1) Complete derecognition of unions in a firm was rare even in firms with low trade union density. (2) Partial derecognition in multi-plant firms was more common. Some 13 per cent of companies with recognized unions in 1984 had had at least partial derecognition by 1990. (3) Large falls in trade union density within a firm have also been rare, though small but observable declines have been commonplace. (4) The coverage of the closed shop has substantially declined, and this decline has been most marked in the last five years. Around one-quarter of firms with recognized unions in 1990, however, still had closed-shop arrangement for at least part of their work-force. (5) There has been no clear decline in the prevalence of multi-unionism or multiple bargaining units. (6) There has been a significant move away from national/industry-wide bargaining, towards negotiations at the individual company or more often the establishment level. (7) In the absence of collective bargaining there have been clear moves away from wage-setting by formal external links, such as wages councils and multi-employer agreements, and even away from worker consultation towards more managerial discretion. (8) In deciding wage settlements, managers are increasingly influenced by company performance and less by multi-employer wage settlements.     

We Want Them All Covered! Collective Bargaining and Firm Heterogeneity: Theory and Evidence from Germany

This article establishes a link between the degree of productivity dispersion within an industry and collective bargaining coverage of the firms in the industry. In a stylized unionized oligopoly model, we show that differences in productivity levels can affect the design of collective wage contracts a sector‐union offers to heterogeneous firms. Using German linked employer–employee data, we test a range of our theoretical hypotheses and find empirical support for them. The dispersion of sector‐level labour productivity decreases the likelihood of firms being covered by a collective bargaining agreement on the industry level, but increases the likelihood of firms being covered by firm‐level agreements. The results hold for different subsamples and (panel) estimation techniques.     

The Microeconomic Impacts of Employee Representatives: Evidence from Membership Thresholds

Employee representatives in firms are a potentially key but not yet studied source of the impact of unions and works councils. Their actions can shape multiple drivers of firm performance, including collective bargaining, strikes, and training. This article examines the impact of union representative mandates by exploiting legal membership thresholds present in many countries. In the case of Portugal, which we examine here, while firms employing up to forty‐nine union members are required to have one union representative; this increases to two (three) union reps for firms with fifty to ninety‐nine (100–199) union members. Drawing on matched employer–employee data on the unionized sector and regression discontinuity methods, we find that a one percentage point increase in the legal union representative/members ratio leads to an increase in firm performance of at least 7 percent. This result generally holds across multiple dimensions of firm performance and appears to be driven by increased training. However, we find no effects of union representatives on firm‐level wages, given the predominance of sectoral collective bargaining.     

Asset-Specific Investment and Unionized Labor

This article investigates the bargaining problem that exists when firms make asset-specific investments and then are subject to excessive union wage demands. In this context, the combination of both large asset specific investment and high union density is important in determining the magnitude of the bargaining problem. Using firm-specific union-density rates and various asset-specificity proxies, evidence is found that the bargaining problem results in substantially lower firm profitability, investment, and employment.     

Unions and Collective Bargaining in the Wake of the Great Recession: Evidence from Portugal

Against the backdrop of its industrial relations architecture, characteristic of the ‘southern European group’ and intimately linked to the recommendations of the Troika, this paper examines four key aspects of Portuguese collective bargaining. First, it provides definitive estimates of private sector union density for that nation. Second, it models the determinants of union density at firm level. Third, it yields estimates of the union wage gap for different ranges of union density. The final issue examined is contract coverage. The received notion that the pronounced reduction in the number of industry‐wide agreements and extension ordinances of late is to be equated with a fall in coverage is shown to be a chimera, the number of workers covered by new and existing agreements remaining largely unaffected by the economic crisis. The reduced frequency of new agreements and extensions is instead attributed to downward nominal wage rigidity in low‐inflation regimes.     

The Impact of Wage Bargaining Regime on Firm‐Level Competitiveness and Wage Inequality: The Case of Ireland

This paper uses a linked employer‐employee dataset to analyze the impact of institutional wage bargaining regimes on average labor costs and within‐firm wage dispersion in private sector companies in Ireland. The results show that while centralized bargaining reduced labor costs within both the indigenous and foreign‐owned sectors, the relative advantage was greater among foreign‐owned firms. The analysis suggests that there are potentially large competitiveness gains to multinational companies that locate in countries implementing a centralized bargaining system. Furthermore, the results provide additional support to the view that collective bargaining reduces within‐firm wage inequality.     

Exclusion and Disarticulation: The Transport and General Workers' Union in the Road Haulage Industry, 1979–1998

The attrition of trade union organization and collective bargaining in the UK is accepted as having been a principal feature of industrial relations since 1980, but there is no general agreement as to the causes. This paper explores trade union disarticulation and exclusion in a 1979–98 study of the Transport and General Workers' Union Road Transport Commercial trade group, which organizes in the road haulage industry. It emphasizes the importance of the legal framework established by the Conservative government in inhibiting union power at a time of the ongoing restructuring of road haulage, providing companies with the opportunity and incentive to exclude trade union organization and fragment union bargaining power.     

The Coverage of Collective Pay-setting Institutions in Britain, 1895–1990

Fewer than 50% of British employees now have their pay and conditions affected by collective pay-setting institutions — collective bargaining or wages councils. This paper charts the historical context for the current picture of a decollectivized Britain, constructing a time series on coverage from 1895 to 1990. Extant estimates and sources of coverage data are presented and discussed alongside estimates drawn from a source used only sparingly before now — the number of workers affected by changes in wage rates of national agreements or wage orders. The recent decline in collective bargaining coverage is the most prolonged ever recorded and has been noticeably steeper than the fall in union density, such that the proportion of British workers covered is lower now than in the 1940s. With the abolition of wages councils in 1993, collective pay-setting machinery now affects the pay and conditions of fewer workers than it did in the 1930s.     

Collective Bargaining and Innovation in Germany: A Case of Cooperative Industrial Relations?

At the level of theory, the effect of collective bargaining on innovation is contested. The large proponderance of the U.S. evidence clearly points to adverse effects, but other‐country experience suggests that certain industrial‐relations systems, or the wider regulatory apparatus, might even tip the balance in favor of unions. Our pooled cross‐ section and difference‐in‐differences estimates provide some weak evidence that German collective bargaining inhibits innovation. However, in conjunction with workplace representation, there is the suggestion that it might actually foster innovative activity.     

Trade Agreement vs. Open Shop: Employers' Choices before WWI

Neither cultural individualism nor hostility to craft control adequately explains American employers' rejection of collective bargaining before World War I. Evidence from selected cases in the U.S. and Britain suggests both that open-shop policies and trade agreements helped employers manage workplace conflict amid major changes in production practices, and that the relative timing and pace of changes in technology, market structure, and union growth shaped employers' choices.     

Membership Participation and Centralized Control

The union faces severe economic and political problems: it is becoming increasingly expensive to perform important union functions, membership losses are difficult to replace, job mortality is high, firm size is small, membership income is modest, skill level is low, and the union has minority status in almost all of its industries. The policy response to financial pressure is to encourage members to volunteer to perform many union functions which the union can not otherwise afford. Policies supportive of this goal include supply of a broad array of services at union headquarters, insistence that members pay dues in person, insistence on meeting attendance, and emphasis on the steward and crew and the role of the experienced member. The political pressure is weakened union authority. Unusual heterogeneity among employers, occupations, and members, plus an unavoidably decentralized collective bargaining situation, present strong centrifugal tendencies. Major variations in occupation, skills, income level, union background, job security, and ethnic and cultural identification contribute to a diversity of interests and loyalties. A tendency for the membership to be clustered or differentiated by character of their employment also adds a potential threat of balkanization by local. The policy response to political pressure has been the effort to centralize authority and initiative. For example, the 1,000-member General Council has been granted almost unlimited governmental authority. The Council is the channel for downward communication flow; the related structuring, sequencing, and common agendas of all union meetings also keep initiative and authority at the Districtwide level. Additional centralizing aspects include the absence of constitutional restraints on leadership freedom of action; the lack of restraints from the international union; emphasis on crew and steward, rather than on local and local officer; the discouragement of electoral conflicts inherent in the application of the “majority rule”; the preferred ballot position of Districtwide candidates; the Districtwide vote required for the four “regional” leaders; and the offsetting of decentralized collective bargaining with an array of control devices. Meeting attendance, dues payments (without benefit of checkoff), and electoral participation are unusually high. However, volunteer offices are difficult to fill; experienced occupants are difficult to hold. There is little volunteer participation in organizing and collective bargaining and participation is way below the level prescribed by union policy pronouncements. Areas of inconsistency, if not conflict, exist between the two major strands of policy, i.e., encouragement of membership participation, on the one hand, and centralization of authority, on the other. Centralization makes it more difficult to involve members in union affairs. De-emphasis of the role of the local officer and organizer in favor of stewards and vice-presidents has minimized potential divisive influences, but at the cost of inhibiting volunteer leadership activity.     

Technological Choice and Union-Management Cooperation

Growth in the number and complexity of "new technology" agreements has led some observers to suggest that companies and unions are entering a new era of bargaining. Key features of the emerging model appear to be formal cooperation around the content and the process, as well as the impacts, of technological change. This paper evaluates these expectations against case study data on technological change in a major unionized firm. Even with a formal commitment to a new approach, intervening factors—intra-organizational power struggles, resource competition, and technical uncertainties—appear to severely limit union involvement and represent major obstacles to a new era of bargaining over technology.     

Transnational Collective Agreements and the Development of New Spaces for Union Action: The Formal and Informal Uses of International and European Framework Agreements in the UK

Transnational collective agreements (TCAs) are an important development in the international dimension of industrial relations. This article compares four case studies of multinational companies in the UK covered by TCAs. Findings show that while the formal influence of TCAs was limited, they were invoked around particular disputes and could strengthen union influence in a context otherwise characterized by limited union rights. Such influence depended on the co‐ordination of workplace‐ and firm‐level industrial relations institutions, union access to management at headquarters level and union receptiveness to and outward engagement with transnational activity. The formal but also the informal dimensions of these dynamics played a significant role.     

The Impact of Union Political Activities on Public-Sector Pay, Employment, and Budgets

Anecdotal evidence suggests that the political power of public employee unions has been a major cause of excessive growth in municipal expenditures. Previous studies, however, have not directly measured union political activities but instead have used some type of unionization or collective bargaining proxy. This paper uses unpublished data from the International City Management Association (ICMA) to develop a more direct measure of police and fire union political activity. It is found that increased union political activity leads to greater department expenditures but not necessarily to greater municipal expenditures or revenues. The results also suggest that unions increase department spending through political activity and not through the collective bargaining process itself. Further, it appears that political activity increases department spending through higher employment and not through higher compensation.     

What Sort of Collective Bargaining Is Emerging in China?

China is experiencing a rapid expansion of what is termed ‘collective bargaining’. The article draws on workplace and sectoral examples to assess what underlies this. Recent changes in labour policy are outlined. Four studies at establishment level describe the use of hybrid representation in response to growing worker activism and internal union reform. Two studies of sectoral bargaining shed light on decentralized decision‐making on pay. Attention is drawn to the growth of employer organizations and increased articulation within the trade union. A form of collective bargaining is emerging where the union draws on state power to improve conditions of employment.     

The Employment Contract: From Collective Procedures to Individual Rights

The article analyses the institutional basis and form of the employment contract in Britain using the 1998 Workplace Employee Relations Survey. It assesses the extent to which collective bargaining still regulates pay and non‐pay aspects of employment. While collective procedures have declined in importance, there has been an increase in legal governance of the employment relationship. Logistic regression analysis establishes that both contractual formalization and legal compliance are greater in larger organizations and where trade unions are present. Trade union activity is also associated with superior fringe benefits. Collective bargaining thus appears to facilitate both access to and improvement on statutory rights.